02 December 2010

Indonesia: Import Duties on Goods

It is obvious that since leaving hukumonline.com I have been pretty slack at keeping up-to-date with Indonesian legal developments outside of the specific areas that interest me most. As a result, I missed a Minister of Finance Regulation dated 29 October 2010 (in Indonesian). This regulation deals with the duties payable on goods over a certain value that are brought into Indonesia.

What is interesting about this regulation is that it seems to be targeting passengers and getting them to declare all goods on entry. Yet, the last time I traveled to Indonesia I am sure that I had to fill in a Customs declaration form that listed what I could and could not bring into Indonesia and what values they could be before I had to declare them and pay any duties that were payable on these goods.

Is this a case of gaining on the merry-go-round and then losing on the swing? The government will soon be facing a rather large financial black hole when the Fiscal Tax that Indonesians and other permanent residents paid for leaving Indonesia shores is removed. Is this regulation really a not-so-subtle attempt to fill that hole?

The basic framework for the regulation, No. 188/PMK.04/2010, are Articles 10B(5), 13(2) and 25(3) of the Customs Law (Law No. 10/1995 as amended by Law No. 17/2006) If you contact hukumonline.com they might forward you Indonesian Legal Briefs and Indonesian Law Digests that I wrote on this area many years ago. Generally, ministerial regulations are used to facilitate implementation of provisions in superior laws.

The regulation distinguishes between personal effects and commercial goods. This is done with a view to establishing what duties are payable. Personal effects are defined as any personal goods that do not satisfy the elements of being commercial goods.

In essence, anyone that must declare personal effects or commercial goods that they are importing / bringing into Indonesia are to do so. They have up to 30 days prior to the date of arrival or 60 days from the date of arrival to do so. There are some variations in specific circumstances for these time limits. For passengers of an airline this can be done on the day of arrival.

The regulation stipulates in Article 8 that the duty free limits are USD 250 for individuals and USD 1000 for families. For any value over these limits duty is payable. Additionally, it is permissible to import 200 cigarettes, 25 cigars, 100 grams of tobacco and 1 litre of alcohol. As I recall, this is pretty much as it was when I last landed in Jakarta. The duty free limits for cabin crew and airline staff, presumably on official duties, are less than for other individuals.

The system is continues to be a red line (declaring goods) and green line (nothing to declare). The regulation lists in Article 13 all the goods that must be declared irrespective of value and sets a limit on cash that may be carried. The cash limit is IDR 100 million or the equivalent in foreign currency. Where a Customs Officer has any suspicions about a passenger, then that Customs Officer is entitled to conduct a physical inspection of the passengers personal effects. In the event the physical inspection uncovers goods that have not been declared, then the passenger / owner of those goods is required to pay the duty that is due. Receipts for any duties paid must be provided to the passenger paying them.

As far as I can tell the regulation does not expressly provide exceptions for goods that have been owned for more than 12 months. I will need to go and check associated regulations to determine this (I have not downloaded them onto my current laptop). However, off the top of my head I recall that there exceptions applied to goods that had been owned for more than 12 months.

For example, if you were an Indonesian student going to study in a foreign university and took your laptop with you. When you returned in 12, 18, 24, or 36 months time with the same laptop there was no need to declare this as a personal effect that was subject to duty.

An article from Kompas (in Indonesian) that includes some comments from the Director General of Customs at the Ministry of Finance does not provide any insight on this front. The example provided only suggests that a camera that is valued at USD 300 will be subject to duty on the USD 50 that exceeds the USD 250 duty free limit. Unfortunately, the Director General does not note any exception for second-hand goods or goods that have been owned for more than 12 months.

If I find anything relevant to a better understanding of what is subject to duty, outside of what I have noted here, I will post it as a postscript.

The regulation comes into force on 1 January 2011.


rani said...

Hi Rob,

I find this blog very informative in answering some practical questions

Rob Baiton said...


Thanks for the link.

I will check it out.

Rob Baiton said...


I checked out the link. Once again, thanks. It sort of says, probably in a more express manner, what I was saying.

I think the concerns with the regulation are not how much it changes the rules, but rather that there seems to be a lot of scope for "creative interpretation" of the rules and this opens the door to a lot of "pungli" (illegal fees).

Personal experience of flying into Jakarta is that immigration and customs officials are quite regularly using "creative interpretation" of what falls under what provisions.

For example, I once had to hand over a 4 books on second language acquisition because I had not declared them and I should of, according to the customs officer, so that they could be vetted to see if they were Marxist propaganda or some other unacceptable political musings.

oh well...

lawbugger said...

seems a bit rough - you have to pay tax as a student if you buy your laptop in INdonesia, use it oseas, then bring it home before a year. Is it possible it might only apply if the laptop was bought overseas?

Rob Baiton said...

@ Lawbugger...

Seeing I do not know who you really are, I will assume that your Indonesian is sufficient to be able to read and understand the link that Rani has included. The commentary there probably explains how [supposedly] the Ministry of Finance views this regulation.

But, just in case, Article 7 seems to provide the exception that you would require to be able to transport already owned, pre-loved, or second hand goods out of and into Indonesia. This exception would also include goods presumably owned for extended periods of time one was overseas.

I guess the issue is how do you prove the origin and the date of acquisition of the goods in question when you arrive at, for example, Soekarno-Hatta? Do you need to supply an inventory or hold all relevant receipts and be able to provide them?

The customs declaration is a self-assessment. And, as would seem most likely, most people don't declare anyway, including things that may have been required to. And, consequently run the risk of being caught. It is the 'being caught' part where the inventory or receipts will become important.

I am pretty sure that my overall point was that the regulation did not change the playing field too much from what I knew from personal experience to be the case.

The question was one of the illegal fees or pungli being more prevalent now as a result of the regulation.

Kris said...

So what'll happen to nonresidents, let's say foreign tourists or students bringing in cameras or laptops but also again leaving with them?

I followed the link given above and it said in such a case one would be subject to the peraturan impor sementara, but what exactly are these? I hope that means you're not liable to pay import duties..

Rob Baiton said...

@ Kris...

The customs declaration is a self-assessment. So, I am guessing that most people will opt not to declare and take their chances with a random inspection.

The risk is that the "fees" are likely to be pretty steep.

The relevant regulation for this (off the top of my head) is Minister of Finance Regulation No. 615/PMK.04/2004. Article 4(2)(f) makes an exception for personal goods that have been brought in for the purposes of tourism.

So, I am guessing tourists bringing in cameras and laptops and other "legal" goodies will not be subject to import duties. I would also suggest that they do not have to declare them on the self-assessment customs declaration.

This is the link to the reg:


Kris said...

Thanks, Rob.

These regulations look like they would not just apply to tourists, but also to students and other short-term visitors looking to stay more like a couple of months. That's been quite helpful for me...

Rob Baiton said...

@ Kris...

I am glad to have been of minimal assistance in helping you find out what you need to know :)

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